NAIROBI, Kenya, May 5 – Housing Finance shrugged off economic shocks to post an impressive 66 percent growth in pre-tax profit for the first quarter of 2011.
The firm posted a profit of Sh171.6 million up from Sh103.6 million for the corresponding period in 2010.
Total sales increased by 45 percent to Sh3.3 billion and the total net Loan Book was up 33 percent to stand at Sh20.3 billion. Mortgage interest income stood at Sh651 million, representing a 31 percent increase on last year.
Housing Finance Managing Director Frank Ireri said the property market would remain steady for the rest of the year despite the economic challenges currently facing the country.
“The current steady supply of fairly priced houses is expected to impact positively on sales activity over the near term,” said Mr Ireri.
Mr Ireri said the current properties on offer have been marginally cushioned from the high cost of input since most commenced construction more than 9 months ago.
Ongoing projects are however expected to bear the impact of rising cost of raw material due to rising energy prices.
“Confidence in property markets however remains at an all time high and now is a good time to buy because of the stable prices,” Mr Ireri said adding the effect of rising cost of inputs would be felt in 2012 when many of the ongoing projects will be complete.
“We have seen constituent parts for construction go up by over 30 percent. We however don’t expect prices to spiral out of control as the government is currently taking measures to stabilise factors driving inflation,” he said.
Despite the rising of cost of living, the mortgage firm has not recorded notable defaults on mortgages.
“The rising demand for housing and the low default rates are clear signs that home owners are still very positive about the state of the housing market,” he said.
The firm wants the government to pass the Housing Bill to enable developers’ better reach the lower end of the market. The Housing Bill will also make it possible to introduce saving products that are more attractive for first time home savers.
Housing Finance is looking to the Small and Medium sized Enterprises, self-employed and the Diaspora market – which is emerging from a recession – to drive future growth.
Housing Finance sustained growth has been driven by the successful strategy revolving around: property supply solutions, product innovation, strong management and diversified mortgage target market.
The mortgage firm plans to tap opportunities in the counties and venture directly into property development to sustain growth in the long term.
“Long term business fundamentals are in place and the firm is well positioned with a strong capital base, volumes and experience to drive growth beyond 2012,” said Mr Ireri.